Workers could be offered longer holidays in a bid to halt a row between the prime minister, Europe and trade union leaders.

Tony Blair is fighting to keep Britain's opt-outs from the working time directive which he is reported to have privately described as "the single worst" legislation he has seen from Brussels.

The temporary deal agreed in 1997, which allows firms to ignore the law if staff agree, is under review.

Blair faces criticism both at home and abroad over his picking and choosing of the bits of European policy he prefers.

Other European Union leaders want the opt out scrapped because it gives Britain an unfair advantage.

And the TUC is entering the debate by stepping up its campaign for an end to the "work 'til you drop culture".

A report in Thursday's Times newspaper claimed that ministers are considering concessions to both Brussels and union bosses.

These could include increasing the statutory full-time paid leave of 20 days as compensation for employees working longer hours than most in Europe.

But the government is thought to have ruled out increasing the number of bank holidays as this would be too restrictive on both firms and families.

One business body, the CBI, claims the directive cost UK companies £7 billion in its first two years of operation from 1998.

However unions argue that family friendly hours boost productivity and avert damaging strike action.